Market & SWOT Analysis for Phoenix Hospital
Section A
| Major market factor | Analyze how the major market factor affects hospital performance. |
| Competitors | The Hanover County Hospital made significant renovations of the hospital to restore the facility’s aesthetics and added a new wide-bore MRI machine to improve its quality scores, reaching the 95th percentile in five of six HCAPS categories. The Medical Center in the county south of Phoenix has physician clinics that offer E-Visits with specialists. The facility is financially stable as it has low debt and mostly offers services on a cash-at-hand basis. Retail pharmacy, although not a direct competitor, has added an instant clinic with low-acuity office visits. In competitive markets, more efficient organizations gain more market share than other competitors (Dauda, 2020). The competition from Hanover County Hospital, the Medical Center in the county south of Phoenix, and the Pharmacy Center’s instant clinic threaten Phoenix Hospital’s market share due to the efficiency and perceived quality of their services. The market share has dropped from 48 to 35 while the competitors’ share has grown to 43 from 30. This has a negative impact on the hospital’s financial performance.
However, competition is a force to establish reforms that improve Phoenix Hospital’s competitiveness. Based on the competitive analysis, the hospital has identified the factors giving the competitors a competitive advantage over Phoenix Hospital. The next three years will see Phoenix Hospital invest in the acquisition of systems that improve its innovativeness. Improvements will focus on upgrading the EHR system to meet regulatory requirements, equipping the emergency services, and obtaining new equipment for the acute care department, including the cardiology department and the MRI equipment. The focus will be on improving the efficiency of service delivery and overall hospital aesthetics. Improving operations efficiency will improve the hospital’s competitiveness and help regain its lost market share with an expected improvement in markets and financial performance. |
| Technology | The current healthcare market is adopting new technologies to improve the quality and efficiency of care services and reduce operating costs. Health care organizations, like in other markets, can combat competition by investing in information technologies that improve information quality and enhance productivity and quality of operations with an impact on profitability (Akpan et al., 2020). Health information technology trends include medical practice management systems, EHRs, E-prescribing software, remote patient monitoring and telehealth, patient portals, and medical billing systems. These information management systems automate daily health care tasks and improve the efficiency of access to patient health data information, therefore improving the quality of healthcare services, the efficiency of care provision and patient access to care services, elimination of errors in care, and improving the safety of patient health information. Health information management technologies also create a network of decision-support tools that support healthcare and business decisions in health organizations.
Phoenix Hospital will need to upgrade its technologies and adopt new technologies to meet regulatory requirements and to better compete with other healthcare facilities. The expenses related to the adoption of new technologies will have a negative impact on the hospital’s performance and productivity in the next three years. However, the focus is on the long-term outcomes. According to Wang et al. (2018), investing in health information technology generates positive financial returns in the long term. The upgrading of the current EHRs will also enable the hospital to meet the requirements of the HITECH Act for meaningful use and qualify for financial incentives and other Medicare programs. |
| Regulatory Changes | Regulations establish the expected standards of quality and safety for healthcare facilities to achieve state certification. They are also applied in the evaluation of outcomes. Meeting the set standards improves the hospital’s quality and safety scores. A higher quality and safety score creates a perception of better services and safety for patients. This improves the healthcare organization’s appeal to patients and new clients. Regulations, especially in health care, are prone to changes and improvements to ensure the market and practice safety, integrity, and efficiency. However, regulatory changes disrupt the business landscape and may create uncertainty over compliance. Healthcare organizations will need to make changes in their operations and practices to meet the requirements of the changes. Regulatory changes and organizational changes to improve compliance with new regulations create new business models and new competitive patterns that may further disrupt the healthcare market.
The regulatory changes create a burden and new opportunities for Phoenix Hospital. The hospital will increase its expenditure budget to improve its EHRs, and safety systems, such as the overhead sprinklers, and upgrade the care delivery systems to meet the growing patient demand. However, the upgrades in EHRs, safety, and care delivery will improve its efficiency, quality, and safety scores. Hospital financial performance is significantly related to its hospital quality and safety performance (Akinleye et al., 2019). Therefore, the regulatory changes will improve Phoenix Hospital’s performance within the next 3 years. |
Section B
Table 1: SWOT Analysis
| Perceived strength (internal) | Perceived weakness (internal) |
| Largest single provider market share | Poor front lobby aesthetics |
| Perceived strength (internal) | Perceived weakness (internal) |
| Implemented electronic medical records system | Insufficient cross-trained nurses to work in the intensive care unit |
| Perceived Opportunities (External) | Perceived Threats (External) |
| Growth in large employers as a new automotive factory is built in the northwest sector of the county. | Growing primary and secondary competition |
| Perceived Opportunities (External) | Perceived Threats (External) |
| Increased number of patients with some form of insurance payment | Short notice for personnel training and documentation on active shooter |
Analysis of existing technology information
Phoenix Hospital has already implemented the first phase of an electronic medical records system. However, it lacks CPOE (computerized physician order entry). The forthcoming Accreditation requirements include the addition of CPOE to accommodate all physician orders to nurses. The current technology information in Phoenix Hospital presents both a strength and an opportunity for the hospital. The electronic medical records system can be regarded as a strength in the meantime, as it provides quick access to complete patient information and other records at the point of care. On the other hand, with the upcoming accreditation requirements, the current electronic medical records system presents an opportunity as the hospital will only need to upgrade the existing information technologies to meet the requirements. The hospital does not have to carry out an expensive acquisition of a whole new technology system. This not only reduces the expenses of acquiring new information systems it also makes it easy for the hospital to upgrade the existing systems to incorporate CPOE and achieve quick accreditation.
Analysis of existing financial information
The total operating revenue for Phoenix Hospital dropped from $365,037,779 last year to $360,583,589 this year. The operating expenses went up from $342,466,278 last to $344,520,462 this year. The hospital has also experienced a drop in income from its operations, recording a drop from $22,571,501 last year to $16,063,127 this year. The financials are a threat. The drop in operating revenue and income from operations and the rising operating expenses threaten Phoenix Hospital’s ability to achieve its financial objectives and finance its operations without increasing its debt load. The financials as a threat can be linked to the shrinking market share due to increasing competition, as reflected by the drop in net revenues from direct patient services dropping from $344,726,245 last year to $343,737,280 this year.
Analysis of existing regulatory information
The regulatory changes present new opportunities for Phoenix Hospital. The regulation changes will increase the number of patients with some form of insurance payment, presenting an opportunity for a larger paying client base. The regulatory changes also require the installation of sprinkler heads within the hospital units and training management personnel on managing active shooter situations. These present an opportunity for Phoenix Hospital to improve its safety and quality scores and gain a competitive edge over the current competition.
Analysis of existing information
“The addition of a new automotive manufacturing plant to the local market this coming year is projected to add 1,500 production line jobs and 300 administrative jobs by year-end. The median income for the production positions is estimated at $45,000 and will provide health, vision, and dental insurance benefits.” This can be considered an opportunity for Phoenix Hospital. Although the demand for health care is not affected by the changes in income, the increase in income and insurance holders will increase the number of people able to afford care services provided by Phoenix Hospital. Research has linked the level of income and wealth to levels of healthcare utilization and access, indicating a significant relationship between high income and increased utilization (McMaughan et al., 2020).
References
Akinleye, D. D., McNutt, L. A., Lazarus, V., & McLaughlin, C. C. (2019). Correlation between hospital finances and quality and safety of patient care. PLoS ONE, 14(8). https://doi.org/10.1371/JOURNAL.PONE.0219124
Akpan, I. J., Soopramanien, D., & Kwak, D. H. (2020). Cutting-edge technologies for small business and innovation in the era of the COVID-19 global health pandemic. Https://Doi.Org/10.1080/08276331.2020.1799294, 33(6), 607–617. https://doi.org/10.1080/08276331.2020.1799294
Dauda, S. (2020, October 12). The Effects of Competition on Jobs and Economic Transformation | Policy Commons. https://policycommons.net/artifacts/1244579/the-effects-of-competition-on-jobs-and-economic-transformation/1798354/
McMaughan, D. J., Oloruntoba, O., & Smith, M. L. (2020). Socioeconomic Status and Access to Healthcare: Interrelated Drivers for Healthy Aging. Frontiers in Public Health, 8, 231. https://doi.org/10.3389/FPUBH.2020.00231
Wang, T., Wang, Y., & McLeod, A. (2018). Do health information technology investments impact hospital financial performance and productivity? International Journal of Accounting Information Systems, 28, 1–13. https://doi.org/10.1016/J.ACCINF.2017.12.002
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Question 
This week, you will continue to work on the Strategic Plan Template. It is important to review the feedback from your faculty each week and incorporate their feedback into your template.
Market & SWOT Analysis for Phoenix Hospital
Complete the Part 2 Market & SWOT Analysis for Phoenix Hospital section of the Strategic Plan Template.